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Top watchdog for the $700-billion bailout fund resigns

Neil M. Barofsky, the outspoken special inspector general who has been the top watchdog of the $700-billion financial bailout fund, submitted his resignation to President Obama on Monday.

Barofsky often has been sharply critical of the way the Treasury Department has run the Troubled Asset Relief Program. He has headed the Office of the Special Inspector General for TARP, known as SIGTARP, which has more than 140 auditors in five offices nationwide.

In the resignation later, Barofsky said he had accomplished his top goals for overseeing the fund and that it was time for him to leave government service.

Those goals included ensuring transparency in how TARP was run and cracking down on people trying to fraudulently profit from the program.

"Thanks in no small part to the dedication of the talented professionals at SIGTARP, TARP stands in a far better and more transparent place today than anyone could have reasonably hoped in December 2008," Barofsky wrote to Obama, alluding to a November estimate from the Congressional Budget Office that the fund's losses would be just $25 billion, down from a mid-2009 projection of $341 billion.

"The anticipated financial costs, while still significant, have fallen dramatically from early projections," he said.

One reason for that drop is that the Treasury Department has adopted many of SIGTARP's numerous recommendations to shield the program from fraud, Barofsky said. . . .

Barofksy's resignation is effective March 30. His office shares oversight of the fund with the Congressional Oversight Panel, formerly headed by Elizabeth Warren, who left to help the administration set up the Consumer Financial Protection Agency.

Barofsky frequently butted heads with Obama administration officials. But he has been fiercely independent in an appointed position that is largely shielded from interference, and there is no indication he is being forced to leave.

Noting he has spent more than 10 straight years working for the government, Barofsky said, "I believe that it is the right time for me to step down and pursue other opportunities." He was appointed by former President George W. Bush in late 2008.

Kristine Belisle, communications director for SIGTARP, said Barofsky made "a personal decision based on a number of factors, including his desire to spend more time with his wife and 9-month-old daughter."

Barofsky said that even though TARP was winding down, there was still work for his office to do. He cited problems with the administration's much-criticized mortgage modification program, which uses TARP money.

Congressional Republicans have praised Barofsky for his tough oversight. And even as they are proposing $100 billion in cuts to the ongoing 2011 budget, House Republican leaders said they wanted to increase SIGTARP's budget by $13 million.

“The fact of the matter is the work that Mr. Barofsky has begun is far from complete. It is imperative that the next [inspector general] pick up immediately where Mr. Barofsky left off," said Rep. Darrell Issa (R-Vista), chairman of the House Oversight and Government Reform Committee. "Moving forward, it is imperative that whoever is nominated by the president to serve as the next SIGTARP demonstrates the same type of vigilance, courage and commitment to transparency that Neil Barofsky brought to this job every day.”